New Irish-backed carbon investment fund for Africa
A €10 million carbon investment fund, the Vita Green Impact Fund, has been established with the backing of Irish venture philanthropists and US impact investors. This initiative, in partnership with the Irish development agency Vita, aims to support 1.3 million individuals in rural Ethiopia and Eritrea. It plans to provide access to safe water and promote the use of carbon-saving cookstoves. The fund’s operation is overseen by Irish fund manager FCI.
This fund is an expanded version of a pilot project run between 2016 and 2020, where Vita raised €2 million, resulting in clean water and cookstoves for 311,000 people, two million tonnes of carbon emissions savings, and conservation and planting of up to five million trees. The resulting carbon offsets were purchased by Irish and international organisations looking to complement emission reductions.
The new fund will provide investors with returns from the sale of verified and accredited carbon credits generated by the fuel-efficient stoves and community water points. Clean water does not have to be boiled and therefore saves trees from being cut down and burned. Improved cookstoves use 60% less wood. Reduced wood-burning means reduced carbon emissions and each tonne of carbon emission savings converts to one tonne of carbon credit. These credits are sold on voluntary carbon markets. The communities adopting the cookstoves and safe water will participate in profits through a community dividend. Following repayment of investors, surplus profits will be circled back with the intention of scaling up the fund to eight million people.